When you’re indebted to people or institutions, it’s only a matter of time before they show up at your door to collect. Sometimes literally. Stop getting debt collector calls and figure out your finances by considering filing for personal bankruptcy. This article has tips that can help you through this complicated journey.
The most important tip a person filing for personal bankruptcy can remember and follow is to be completely transparent in all dealings. It is vital that you disclose all information about your assets and income so there are no delays or penalties, such as a court barring you from filing again later in the future.
Unsecured Credit
You may still have trouble receiving any unsecured credit after a bankruptcy. In this event, you should attempt to apply for a secured card or two. That will show lenders that you are committed to rebuilding your credit. When you have done well with secured cards for a while, you should be able to obtain an unsecured credit card.
Don’t try to hide anything if you are filing for bankruptcy, as this will hurt you in the long run. Whomever you plan to use should know a lot about the finances that you have, both the good and the bad. Do not hold back anything, and form a sound plan to make peace with your reality.
Before pulling the trigger on bankruptcy, be sure that other solutions aren’t more appropriate for your case. For instance, a consumer credit counseling program may be a better bet if your debts are relatively small. You may also find people will allow you to make lower payments. If that happens, get records of the debt modifications.
Learn about teh differences between Chapter 13 and Chapter 7 bankruptcy. Be sure you go on the Internet and do your research to see what’s best for you. Before making any decisions, discuss the information you have learned with your lawyer.
Chapter 13
Find out more about Chapter 13. You are eligible for filing bankruptcy under Chapter 13 if you work and owe less than $250,000. That kind of bankruptcy allows you to hold on to your personal things and real estate while repaying your debts with a plan to consolidate your debt. Such plans generally take between 3 and 5 years to complete, at which point. a discharge will be granted. Just know that missing one payment could cause your case to be dismissed.
If your paycheck is larger than your debts, avoid filing for bankruptcy. It can seem like bankruptcy can be an easy way to avoid paying back your debts, however it leaves a serious mark in your credit report that can last between seven and ten years.
Chapter 7
Remember that filing for Chapter 7 personal bankruptcy will not just affect you. Think about the effect it will have on business associates, friends and family or anyone else who may be a co-signer with you. Once you complete a Chapter 7 bankruptcy, you will be free of any responsibility of debt, which could put all responsibility on someone close to you. Sadly, this will not be the case for your co debtor. Your creditors may simply turn their attention to your hapless acquaintance.
Be decisive at the correct moment in time. Proper timing is important, especially when it comes to personal bankruptcy. In some cases, you should file for bankruptcy right away, but in others, there may be reasons why filing quickly would be a bad idea. Discuss your particular situation with your bankruptcy attorney to determine the best time to file.
Get the word “shame” out of your head when filing for bankruptcy. Many people feel guilty, embarrassed and unworthy when dealing with bankruptcy. These are useless emotions, however, and can be harmful to your mental state. Maintaining a positive outlook during a troublesome financial upheaval is the best way to cope with bankruptcy.
While personal bankruptcy is a valid option, you should consider the other options available to you before making your final decision. You must remember that some debt consolidation services really are just a scam, and using them will result in even more debt for you. Keep the advice from this article in mind in order to make ideal financial decisions and stay away from debt.
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